Dukascopy Bank Team
Dukascopy Bank SA
GBP/NZD 1H Chart: Channel Down
Comment: At the beginning of the week GBP/NZD came close to the upper boundary of the falling wedge forming in the daily chart. As a result, the pair bounced off of 2.1240 and pierced through the five-week up-trend line, exposing the February low. Accordingly, we are bearish on the Sterling and expect the rate to keep falling within the descending channel. If both the weekly S2 at 2.0770 and the previous month’s minimum at 2.0630 fail to initiate a rally, during the next several days GBP/NZD may already test demand circa 2.0550, where the weekly S3 reinforces the lower trend-line of the pattern. In the meantime, positioning among the SWFX traders reveals that they are currently undecided—49% of positions are long and 51% are short.
EUR/CAD 1H Chart: Channel Down
Comment: Although EUR/CAD appears to be trading in a well-defined channel at the moment, there is little room left for the Euro to go lower. The technical indicators are also mostly pointing south, but the fact that the currency pair is fluctuating near an intersection of the four-week and 12-month rising support lines, trumps these bearish signals. Accordingly, while we might see a sell-off from 1.4754/43 after the current rally, the downside is to be limited by a demand area between 1.4685 and 1.4650. The rate is soon expected to breach the red trend-line and set course towards 1.4840, namely the March 27 high. Meanwhile, there are other arguments against a prolonged recovery—the Euro is overbought with 74% of all positions being long.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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